Market News

– After an implicit statement from the Central Bank now the administration announced that the parliament shall decide whether to drop 4 zeros from Iran national currency (Iranian Rial – IRR) or not. It seems that the government is decisive to drop zeros and prepared a bill in this regard that needs to be ratified by Majlis. A CBI official told the press that redenomination of IRR will take at least two years and it could not happen during inflationary periods. “Dropping zeros from Iran currency need 1 digit inflation rate, less dependence on oil revenues and a more independent central Bank,” said he.

– Iranian government biggest creditors have been listed by the Management and Planning Organization with the aim of transparency and taking proper measures to address one the most concerning issues of the domestic economy. According to data, the total amount of government liabilities at the end of the fiscal previous year (1397 – 2017/18) reached IRR 5,654,000 bn (USD 53.85 bn) of which Central Bank, Iranian Banks and Social Security organization had the highest shares (58.89%) on aggregate). The ratio of government debts to GDP was 36% (expected to reach 40%) while the region norm rate hovers below 30%.

– Iran ranked first on energy subsidies globally. With spending $45.1 billion on fossil energy consumption subsidies in 2017, Iran ranked first globally, International Energy Agency reported. The value, which increased 55% year-on-year, equals to 10.4% of Iran’s annual GDP and 15% of total global energy subsidies. The below image has the details:

In the Market

Equities did slightly higher today as investors are still cautious towards the commodity-based sectors and are more in favour of service-based industries. TEDPIX (+0.10%) rose for 168.36 green points to stand a tick higher than 161K level. IFEX (+0.62%) also performed better than yesterday and reclaimed the 1,880 ground again.

Today’s trades had a hint of more interest towards service-based sectors like the mid-weighted Banking (+2.88%) as the CBI officials along with parliament members gave the green light on banks capital restructuring via recognition of their FX resources free market rate translation as a source of raising capital. Mellat Bank (BMLT, +4.98%) has the highest amount of foreign currency as its resources that made its ticker to close with +60 mn orders left in the buy queue.

Agah analysis of the retail side movement shows that the sector is the only one with a strong cash inflow during the last couple of sessions.

Elsewhere and on the heavy weighted Metals (-0.50%) sector, things went wrong for the copper giant, National Copper Industries (MSMI, -1.79%). Despite its recent capital raising and all the good news on its exports, the lack of global demand along with a slowing China horizon made the situation tight for the ticker. Copper trades on Iran Mercantile Exchange were not as strong as it was used to be as well which made the supply even harder.

In general, it is widely believed that until after a clear solution comes out from the US-China trade war, global and domestic commodity markets are in deep pressure and Metals, Chemicals (+0.12%)and Oil Products (-0.42%) sectors are not expected to perform any good during the year 2019.

DISCLAIMER: This report has been prepared and issued by Agah Brokerage Firm on the basis of publicly available information, internally developed data and other sources believed to be reliable. The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. Agah does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. Any expressions of opinions are subject to change without notice.